8-K
SunCoke Energy, Inc. (SXC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________
FORM 8-K
___________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
February 2, 2023
Date of Report (date of earliest event reported)
___________________________________
SunCoke Energy, Inc.
(Exact name of registrant as specified in its charter)
___________________________________
| Delaware<br><br>(State of Incorporation) | 001-35243<br><br>(Commission File Number) | 90-0640593<br><br>(IRS Employer Identification Number) | |||
|---|---|---|---|---|---|
| 1011 Warrenville Road, Suite 600 | |||||
| Lisle, | IL | 60532 | |||
| (Address of principal executive offices and zip code) | (630) | 824-1000 | |||
| --- | --- | ||||
| (Registrant's telephone number, including area code) |
___________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||
|---|---|---|---|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | Securities registered pursuant to Section 12(b) of the Act: | |||
| --- | --- | --- | |||
| Title of each class | Trading Symbol | Name of each exchange on which registered | |||
| Common stock, par value $0.01 | SXC | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 - Results of Operations and Financial Condition.
On February 2, 2023, SunCoke Energy, Inc. (the “Company”) issued a press release announcing fourth quarter and full-year 2022 financial results. A copy of this press release is attached as Exhibit 99.1 and is incorporated herein by reference.
Item 7.01 - Regulation FD Disclosure.
As noted above, on February 2, 2023, the Company issued a press release announcing fourth quarter and full-year 2022 financial results. Additional information concerning the Company’s fourth quarter and full-year 2022 financial results will be presented in a slide presentation to investors during a previously announced teleconference on February 2, 2023. A copy of the slide presentation is attached as Exhibit 99.2 and is incorporated herein by reference.
The information in this report, being furnished pursuant to Items 2.02, 7.01 and 9.01 of Form 8-K, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and is not incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 8.01 Other Events.
On February 2, 2023, the Company issued a press release announcing the declaration of its quarterly cash dividend. A copy of this press release is attached hereto as Exhibit 99.3 and is incorporated herein by reference.
Safe Harbor Statement
Statements contained in the exhibits to this report that state the Company’s or management’s expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The Company’s actual results could differ materially from those projected in such forward-looking statements. Factors that could affect those results include those mentioned in the documents that the Company has filed with the Securities and Exchange Commission.
Item 9.01 - Financial Statements and Exhibits.
(d): The following exhibits are being filed herewith:
| Exhibit No. | Description |
|---|---|
| 99.1 | SunCoke Energy, Inc. Press Release, announcing earnings (February 2, 2023) |
| 99.2 | SunCoke Energy, Inc. Slide Presentation regarding earnings (February 2, 2023) |
| 99.3 | SunCoke Energy, Inc. Press Release, announcing cash dividend (February 2, 2023) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized on this 2nd day of February, 2023.
| SUNCOKE ENERGY, INC. | |
|---|---|
| By: | /s/ Bonnie M. Edeus |
| Name: | Bonnie M. Edeus |
| Title: | Vice President and Controller |
Document
Investors and Media:
Shantanu Agrawal
(630) 824-1907
SUNCOKE ENERGY, INC. ANNOUNCES RECORD 2022 RESULTS AND
PROVIDES FULL-YEAR 2023 GUIDANCE
•Net income attributable to SXC was $100.7 million, or $1.19 per share, for the full-year 2022; Net income attributable to SXC was $11.8 million, or $0.14 per share, in the fourth quarter 2022
•Full-year 2022 consolidated Adjusted EBITDA was $297.7 million, representing record full-year financial performance; Fourth quarter Adjusted EBITDA was $58.9 million
•Operating cash flow was $208.9 million for the full-year 2022, within our revised guidance of $200 million to
$215 million
•Full-year 2023 consolidated Adjusted EBITDA is expected to be between $250 million and $265 million
LISLE, Ill. (February 1, 2023) - SunCoke Energy, Inc. (NYSE: SXC) (the "Company" or "SunCoke") today reported fourth quarter and full-year 2022 results, reflecting record financial performance for the second consecutive year from our cokemaking and logistics businesses.
"2022 was an exceptional year for SunCoke, with favorable contribution margins from export coke sales and strong volumes and pricing within our Logistics segment contributing to another record year for Adjusted EBITDA," said Mike Rippey, Chief Executive Officer of SunCoke Energy, Inc. "We made significant progress on our capital allocation goals in 2022: reducing gross debt by $83 million, increasing quarterly dividends by 33%, and entering into a non-binding letter of intent with United States Steel Corporation ("U. S. Steel") for a new granulated pig iron facility at Granite City. We also expanded our footprint in the foundry business by increasing our market participation."
"As we enter 2023, we remain focused on executing against our well established objectives of exceptional safety performance, operational excellence, and a balanced approach to capital allocation," said Katherine Gates, President of SunCoke Energy, Inc. "We expect 2023 consolidated Adjusted EBITDA to be between $250 million and $265 million, driven by our Domestic Coke plants continuing to operate at full capacity, but with the backdrop of a weaker export market. We anticipate capital expenditures of approximately $95 million, including the foundry coke expansion project which will allow us to build upon our success in this market. We plan to execute against these objectives and deliver significant value to SunCoke stakeholders."
CONSOLIDATED RESULTS
| Three Months Ended December 31, | Years Ended December 31, | |||||
|---|---|---|---|---|---|---|
| (Dollars in millions) | 2022 | 2021 | Increase/(Decrease) | 2022 | 2021 | Increase/(Decrease) |
| Sales and other operating revenues | $ 514.0 | $ 365.3 | $ 148.7 | $ 1,972.5 | $ 1,456.0 | $ 516.5 |
| Net income attributable to SXC | $ 11.8 | $ 12.7 | $ (0.9) | $ 100.7 | $ 43.4 | $ 57.3 |
| Adjusted EBITDA(1) | $ 58.9 | $ 62.9 | $ (4.0) | $ 297.7 | $ 275.4 | $ 22.3 |
(1)See definition of Adjusted EBITDA and reconciliation elsewhere in this release.
Revenues increased during both the fourth quarter and full-year 2022 as compared to the same prior year periods, primarily reflecting the pass-through of higher coal costs in the Domestic Coke segment and higher volumes in the Logistics segment. Full-year 2022 revenues additionally benefit from higher pricing on export coke sales and higher pricing in the Logistics segment.
Net income attributable to SXC for the fourth quarter 2022 decreased from the same prior year period, driven by unfavorable operating results discussed above. Net income attributable to SXC for the full-year 2022 increased from the same prior year period, driven by favorable operating results discussed above as well as the absence of debt refinancing related expenses recorded in the second quarter of the prior year and income tax benefits recorded in the third quarter of 2022 as a result of the release of a valuation allowance established on the deferred tax assets attributable to existing foreign tax credit carryforwards and the recognition of research and development credits.
Fourth quarter 2022 Adjusted EBITDA decreased as compared to the same prior year period, primarily reflecting lower export coke pricing. Full-year 2022 Adjusted EBITDA increased as compared to the same prior year period, primarily reflecting higher contribution margins on export coke sales as well as higher pricing in the Logistics segment.
SEGMENT RESULTS
Domestic Coke
Domestic Coke consists of cokemaking facilities and heat recovery operations at our Jewell, Indiana Harbor, Haverhill, Granite City and Middletown plants.
| Three Months Ended December 31, | Years Ended December 31, | |||||
|---|---|---|---|---|---|---|
| (Dollars in millions, except per ton amounts) | 2022 | 2021 | Increase/(Decrease) | 2022 | 2021 | Increase/(Decrease) |
| Sales and other operating revenues | $ 485.1 | $ 340.3 | $ 144.8 | $ 1,856.9 | $ 1,354.5 | $ 502.4 |
| Adjusted EBITDA(1) | $ 46.5 | $ 53.4 | $ (6.9) | $ 263.4 | $ 243.4 | $ 20.0 |
| Sales Volume (in thousands of tons) | 1,040 | 1,026 | 14 | 4,031 | 4,183 | (152) |
| Adjusted EBITDA per ton(2) | $ 44.71 | $ 52.05 | $ (7.34) | $ 65.34 | $ 58.19 | $ 7.15 |
(1)See definitions of Adjusted EBITDA and reconciliation elsewhere in this release.
(2)Reflects Domestic Coke Adjusted EBITDA divided by Domestic Coke sales volumes.
The increases in revenue for both the fourth quarter and full-year 2022 as compared to the same prior year periods primarily reflects the pass-through of higher coal costs.
Fourth quarter 2022 Adjusted EBITDA decreased as compared to the same prior year period, primarily reflecting lower export coke pricing and higher O&M costs. Full-year 2022 Adjusted EBITDA increased as compared to the same prior year period, driven by higher contribution margins on export coke sales.
Logistics
Logistics consists of the handling and mixing services of coal and other aggregates at our Convent Marine Terminal (“CMT”), Lake Terminal, Kanawha River Terminals (“KRT”) and Dismal River Terminal (“DRT”).
| Three Months Ended December 31, | Years Ended December 31, | |||||
|---|---|---|---|---|---|---|
| (Dollars in millions) | 2022 | 2021 | Increase/(Decrease) | 2022 | 2021 | Increase/(Decrease) |
| Sales and other operating revenues | $ 18.8 | $ 15.1 | $ 3.7 | $ 77.6 | $ 64.9 | $ 12.7 |
| Intersegment sales | $ 6.7 | $ 6.8 | $ (0.1) | $ 28.9 | $ 27.1 | $ 1.8 |
| Adjusted EBITDA(1) | $ 11.7 | $ 9.6 | $ 2.1 | $ 49.7 | $ 43.5 | $ 6.2 |
| Tons handled (thousands of tons)(2) | 5,525 | 4,589 | 936 | 22,291 | 19,933 | 2,358 |
(1)See definitions of Adjusted EBITDA and reconciliation elsewhere in this release.
(2)Reflects inbound tons handled during the period.
The increases in both revenues and Adjusted EBITDA for the fourth quarter and the full-year 2022 as compared to the same prior year periods were driven by higher volumes. The increases in both revenues and Adjusted EBITDA for the full-year 2022 as compared to the same prior year period also reflect the benefit of higher pricing.
Brazil Coke
Brazil Coke consists of a cokemaking facility in Vitória, Brazil, which we operate for an affiliate of ArcelorMittal.
| Three Months Ended December 31, | Years Ended December 31, | |||||
|---|---|---|---|---|---|---|
| (Dollars in millions) | 2022 | 2021 | Increase/(Decrease) | 2022 | 2021 | Increase/(Decrease) |
| Sales and other operating revenues | 10.1 | 9.9 | $ 0.2 | 38.0 | 36.6 | $ 1.4 |
| Adjusted EBITDA(1) | 3.1 | 4.2 | $ (1.1) | 14.5 | 17.2 | $ (2.7) |
| Brazilian Coke production—operated facility (thousands of tons) | 377 | 417 | (40) | 1,585 | 1,685 | (100) |
(1)See definitions of Adjusted EBITDA and reconciliation elsewhere in this release.
Revenues for the fourth quarter and full-year 2022 were comparable to the same prior year period. The pass through of higher reimbursable operating and maintenance spending was mostly offset by lower volumes due to planned outages, resulting in the absence of a production bonus for meeting certain volume targets. The decreases in Adjusted EBITDA for the fourth quarter and full-year 2022 as compared to the same prior year period were driven by lower volumes discussed above.
Corporate and Other
Corporate expenses that can be identified with a segment have been included in determining segment results. The remainder is included in Corporate and Other.
| Three Months Ended December 31, | Years Ended December 31, | |||||
|---|---|---|---|---|---|---|
| (Dollars in millions) | 2022 | 2021 | Increase/(Decrease) | 2022 | 2021 | Increase/(Decrease) |
| Adjusted EBITDA(1) | (2.4) | (4.3) | $ 1.9 | (29.9) | (28.7) | $ (1.2) |
(1)See definitions of Adjusted EBITDA and reconciliation elsewhere in this release.
Corporate and other Adjusted EBITDA results improved for the fourth quarter 2022 as compared to the same prior year period, reflecting favorable valuation adjustments as a result of changes in discount rates on certain legacy liabilities, which decreased legacy cost approximately $3.3 million during the fourth quarter, partially offset by higher employee related expenses. Corporate and other Adjusted EBITDA results were unfavorable for the full-year 2022, primarily driven by higher employee related expenses, partially offset by lower legacy liability costs discussed above.
2023 OUTLOOK
Our 2023 guidance is as follows:
•Domestic coke total production is expected to be approximately 4.0 million tons
•Consolidated Net Income is expected to be between $59 million and $76 million
•Consolidated Adjusted EBITDA is expected to be between $250 million to $265 million
•Capital expenditures are projected to be approximately $95 million
•Operating cash flow is estimated to be between $200 million and $215 million
•Cash taxes are projected to be between $12 million and $16 million
RELATED COMMUNICATIONS
We will host our quarterly earnings call at 11:00 a.m. Eastern Time (10:00 a.m. Central Time) today. The conference call will be webcast live and archived for replay in the Investors section of www.suncoke.com. Investors and analysts may participate in this call by dialing 1-888-660-6347 in the U.S. or 1-929-201-6594 if outside the U.S., confirmation code 36382.
SUNCOKE ENERGY, INC.
SunCoke Energy, Inc. (NYSE: SXC) supplies high-quality coke to domestic and international customers. Our coke is used in the blast furnace production of steel as well as the foundry production of casted iron, with the majority of sales under long-term, take-or-pay contracts. We also export coke to overseas customers seeking high-quality product for their blast furnaces. Our process utilizes an innovative heat-recovery technology that captures excess heat for steam or electrical power generation and draws upon more than 60 years of cokemaking experience to operate our facilities in Illinois, Indiana, Ohio, Virginia and Brazil. Our logistics business provides export and domestic material handling services to coke, coal, steel, power and other bulk customers. The logistics terminals have the collective capacity to mix and transload more than 40 million tons of material each year and are strategically located to reach Gulf Coast, East Coast, Great Lakes and international ports. To learn more about SunCoke Energy, Inc., visit our website at www.suncoke.com.
SunCoke routinely announces material information to investors and the marketplace using press releases, Securities and Exchange Commission filings, public conference calls, webcasts and SunCoke's website at http://www.suncoke.com/English/investors/sxc. The information that SunCoke posts to its website may be deemed to be material. Accordingly, SunCoke encourages investors and others interested in SunCoke to routinely monitor and review the information that SunCoke posts on its website, in addition to following SunCoke's press releases, Securities and Exchange Commission filings and public conference calls and webcasts.
NON-GAAP FINANCIAL MEASURES
In addition to U.S. GAAP measures, this press release contains certain non-GAAP financial measures. These non-GAAP financial measures should not be considered as alternatives to the measures derived in accordance with U.S. GAAP. Non-GAAP financial measures have important limitations as analytical tools, and you should not consider them in isolation or as substitutes for results as reported under U.S. GAAP. Additionally, other companies may calculate non-GAAP metrics differently than we do, thereby limiting their usefulness as a comparative measure. Because of these and other limitations, you should consider our non-GAAP measures only as supplemental to other U.S. GAAP-based financial performance measures, including revenues and net income. Reconciliations to the most comparable GAAP financial measures are included following the presentation of financial and operating results included at the end of this press release.
DEFINITIONS
•Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted for any impairments, restructuring costs, gains or losses on extinguishment of debt, and/or transaction costs ("Adjusted EBITDA"). EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives to net income or operating income under GAAP and may not be comparable to other similarly titled measures in other businesses. Management believes Adjusted EBITDA is an important measure in assessing operating
performance. Adjusted EBITDA provides useful information to investors because it highlights trends in our business that may not otherwise be apparent when relying solely on GAAP measures and because it eliminates items that have less bearing on our operating performance. EBITDA and Adjusted EBITDA are not measures calculated in accordance with GAAP, and they should not be considered a substitute for net income, or any other measure of financial performance presented in accordance with GAAP.
•Adjusted EBITDA attributable to SXC represents Adjusted EBITDA less Adjusted EBITDA attributable to noncontrolling interests.
FORWARD-LOOKING STATEMENTS
This press release and related conference call contain “forward-looking statements” (as defined in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended). Forward-looking statements often may be identified by the use of such words as "believe," "expect," "plan," "project," "intend," "anticipate," "estimate," "predict," "potential," "continue," "may," "will," "should," or the negative of these terms, or similar expressions. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Any statements made in this press release or during the related conference call that are not statements of historical fact, including statements about our full-year 2023 guidance, the timing of completing the foundry expansion project, the ability of our domestic coke plants to continue to operate at full capacity, and our expectation of a weaker export market, are forward-looking statements and should be evaluated as such. Forward-looking statements represent only our beliefs regarding future events, many of which are inherently uncertain and involve significant known and unknown risks and uncertainties (many of which are beyond the control of SunCoke) that could cause our actual results and financial condition to differ materially from the anticipated results and financial condition indicated in such forward-looking statements. These risks and uncertainties include, but are not limited to, the risks and uncertainties described in Item 1A (“Risk Factors”) of our Annual Report on Form 10-K for the most recently completed fiscal year, as well as those described from time to time in our other reports and filings with the Securities and Exchange Commission (SEC).
In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, SunCoke has included in its filings with the Securities and Exchange Commission cautionary language identifying important factors (but not necessarily all the important factors) that could cause actual results to differ materially from those expressed in any forward-looking statement made by SunCoke. For information concerning these factors and other important information regarding the matters discussed in this press release and related conference call, see SunCoke's Securities and Exchange Commission filings, copies of which are available free of charge on SunCoke's website at www.suncoke.com or on the SEC's website at www.sec.gov. All forward-looking statements included in this press release and related conference call are expressly qualified in their entirety by such cautionary statements. Unpredictable or unknown factors not discussed in this press release and related conference call also could have material adverse effects on forward-looking statements.
Forward-looking statements are not guarantees of future performance, but are based upon the current knowledge, beliefs and expectations of SunCoke management, and upon assumptions by SunCoke concerning future conditions, any or all of which ultimately may prove to be inaccurate. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. SunCoke does not intend, and expressly disclaims any obligation, to update or alter its forward-looking statements (or associated cautionary language), whether as a result of new information, future events, or otherwise, after the date of this press release except as required by applicable law.
SunCoke Energy, Inc.
Consolidated Statements of Income
| Three Months Ended December 31, | Years Ended<br><br>December 31, | |||
|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |
| (Unaudited) | (Unaudited) | (Unaudited) | (Audited) | |
| (Dollars and shares in millions, except per share amounts) | ||||
| Revenues | ||||
| Sales and other operating revenue | $ 514.0 | $ 365.3 | $ 1,972.5 | $ 1,456.0 |
| Costs and operating expenses | ||||
| Cost of products sold and operating expenses | 441.7 | 288.9 | 1,604.9 | 1,118.8 |
| Selling, general and administrative expenses | 13.5 | 13.5 | 71.4 | 61.8 |
| Depreciation and amortization expense | 35.8 | 34.9 | 142.5 | 133.9 |
| Total costs and operating expenses | 491.0 | 337.3 | 1,818.8 | 1,314.5 |
| Operating income | 23.0 | 28.0 | 153.7 | 141.5 |
| Interest expense, net | 7.7 | 7.7 | 32.0 | 42.5 |
| Loss on extinguishment of debt | — | — | — | 31.9 |
| Income before income tax expense | 15.3 | 20.3 | 121.7 | 67.1 |
| Income tax expense | 2.5 | 6.3 | 16.8 | 18.3 |
| Net income | 12.8 | 14.0 | 104.9 | 48.8 |
| Less: Net income attributable to noncontrolling interests | 1.0 | 1.3 | 4.2 | 5.4 |
| Net income attributable to SunCoke Energy, Inc. | $ 11.8 | $ 12.7 | $ 100.7 | $ 43.4 |
| Earnings attributable to SunCoke Energy, Inc. per common share: | ||||
| Basic | $ 0.14 | $ 0.15 | $ 1.20 | $ 0.52 |
| Diluted | $ 0.14 | $ 0.15 | $ 1.19 | $ 0.52 |
| Weighted average number of common shares outstanding: | ||||
| Basic | 83.9 | 83.1 | 83.8 | 83.0 |
| Diluted | 84.8 | 84.0 | 84.6 | 83.7 |
SunCoke Energy, Inc.
Consolidated Balance Sheets
| December 31, | ||
|---|---|---|
| 2022 | 2021 | |
| (Unaudited) | (Audited) | |
| (Dollars in millions, except par value amounts) | ||
| Assets | ||
| Cash and cash equivalents | $ 90.0 | $ 63.8 |
| Receivables, net | 104.8 | 77.6 |
| Inventories | 175.2 | 127.0 |
| Other current assets | 4.0 | 3.5 |
| Total current assets | 374.0 | 271.9 |
| Properties, plants and equipment (net of accumulated depreciation of $1,276.0 million and $1,160.1 million at December 31, 2022 and 2021, respectively) | 1,229.3 | 1,287.9 |
| Intangible assets, net | 33.2 | 35.2 |
| Deferred charges and other assets | 18.1 | 20.4 |
| Total assets | $ 1,654.6 | $ 1,615.4 |
| Liabilities and Equity | ||
| Accounts payable | $ 159.3 | $ 126.0 |
| Accrued liabilities | 61.4 | 53.0 |
| Current portion of financing obligation | 3.3 | 3.2 |
| Total current liabilities | 224.0 | 182.2 |
| Long-term debt and financing obligation | 528.9 | 610.4 |
| Accrual for black lung benefits | 52.2 | 57.9 |
| Retirement benefit liabilities | 16.4 | 21.8 |
| Deferred income taxes | 172.3 | 169.0 |
| Asset retirement obligations | 13.4 | 11.6 |
| Other deferred credits and liabilities | 24.7 | 27.1 |
| Total liabilities | 1,031.9 | 1,080.0 |
| Equity | ||
| Preferred stock, $0.01 par value. Authorized 50,000,000 shares; no issued shares at both December 31, 2022 and 2021 | — | — |
| Common stock, $0.01 par value. Authorized 300,000,000 shares; issued 98,815,780 and 98,496,809 shares at December 31, 2022 and 2021, respectively | 1.0 | 1.0 |
| Treasury stock, 15,404,482 shares at both December 31, 2022 and 2021 | (184.0) | (184.0) |
| Additional paid-in capital | 728.1 | 721.2 |
| Accumulated other comprehensive loss | (13.0) | (16.7) |
| Retained earnings (deficit) | 53.5 | (23.4) |
| Total SunCoke Energy, Inc. stockholders' equity | 585.6 | 498.1 |
| Noncontrolling interests | 37.1 | 37.3 |
| Total equity | 622.7 | 535.4 |
| Total liabilities and equity | $ 1,654.6 | $ 1,615.4 |
SunCoke Energy, Inc.
Consolidated Statements of Cash Flows
| Years Ended December 31, | ||
|---|---|---|
| 2022 | 2021 | |
| (Unaudited) | (Audited) | |
| (Dollars in millions) | ||
| Cash Flows from Operating Activities: | ||
| Net income | $ 104.9 | $ 48.8 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization expense | 142.5 | 133.9 |
| Deferred income tax expense | 2.3 | 9.3 |
| Share-based compensation expense | 6.7 | 6.1 |
| Loss on extinguishment of debt | — | 31.9 |
| Changes in working capital pertaining to operating activities: | ||
| Receivables, net | (32.3) | (31.3) |
| Inventories | (48.2) | (1.1) |
| Accounts payable | 27.4 | 29.5 |
| Accrued liabilities | 8.4 | 6.3 |
| Other | (2.8) | (0.3) |
| Net cash provided by operating activities | 208.9 | 233.1 |
| Cash Flows from Investing Activities: | ||
| Capital expenditures | (75.5) | (98.6) |
| Other investing activities | 5.3 | (0.7) |
| Net cash used in investing activities | (70.2) | (99.3) |
| Cash Flows from Financing Activities: | ||
| Proceeds from issuance of long-term debt | — | 500.0 |
| Repayment of long-term debt | — | (609.3) |
| Proceeds from revolving facility | 596.0 | 690.1 |
| Repayment of revolving facility | (676.0) | (663.4) |
| Repayment of financing obligation | (3.2) | (2.9) |
| Debt issuance costs | — | (12.0) |
| Dividends paid | (23.6) | (20.1) |
| Cash distributions to noncontrolling interests | (4.4) | — |
| Other financing activities | (1.3) | (0.8) |
| Net cash used in financing activities | (112.5) | (118.4) |
| Net increase in cash and cash equivalents | 26.2 | 15.4 |
| Cash and cash equivalents at beginning of year | 63.8 | 48.4 |
| Cash and cash equivalents at end of year | $ 90.0 | $ 63.8 |
| Supplemental Disclosure of Cash Flow Information | ||
| Interest paid, net of capitalized interest of zero and $0.5 million, respectively | $ 28.5 | $ 40.0 |
| Income taxes paid, net of refunds of $0.5 million and $2.9 million, respectively | $ 14.5 | $ 2.9 |
SunCoke Energy, Inc.
Segment Operating Data
| Three Months Ended December 31, | Years Ended December 31, | |||
|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |
| (Unaudited) | (Unaudited) | Unaudited) | (Audited) | |
| (Dollars in millions) | ||||
| Sales and other operating revenues: | ||||
| Domestic Coke | $ 485.1 | $ 340.3 | $ 1,856.9 | $ 1,354.5 |
| Brazil Coke | 10.1 | 9.9 | 38.0 | 36.6 |
| Logistics | 18.8 | 15.1 | 77.6 | 64.9 |
| Logistics intersegment sales | 6.7 | 6.8 | 28.9 | 27.1 |
| Elimination of intersegment sales | (6.7) | (6.8) | (28.9) | (27.1) |
| Total sales and other operating revenue | $ 514.0 | $ 365.3 | $ 1,972.5 | $ 1,456.0 |
| Adjusted EBITDA(1) | ||||
| Domestic Coke | $ 46.5 | $ 53.4 | $ 263.4 | $ 243.4 |
| Brazil Coke | 3.1 | 4.2 | 14.5 | 17.2 |
| Logistics | 11.7 | 9.6 | 49.7 | 43.5 |
| Corporate and Other | (2.4) | (4.3) | (29.9) | (28.7) |
| Total Adjusted EBITDA | $ 58.9 | $ 62.9 | $ 297.7 | $ 275.4 |
| Coke Operating Data: | ||||
| Domestic Coke capacity utilization(2) | 101 % | 100 % | 100 % | 101 % |
| Domestic Coke production volumes (thousands of tons) | 1,023 | 1,031 | 4,023 | 4,162 |
| Domestic Coke sales volumes (thousands of tons) | 1,040 | 1,026 | 4,031 | 4,183 |
| Domestic Coke Adjusted EBITDA per ton(3) | $ 44.71 | $ 52.05 | $ 65.34 | $ 58.19 |
| Brazilian Coke production—operated facility (thousands of tons) | 377 | 417 | 1,585 | 1,685 |
| Logistics Operating Data: | ||||
| Tons handled (thousands of tons) | 5,525 | 4,589 | 22,291 | 19,933 |
(1)See definition of Adjusted EBITDA and reconciliation to GAAP elsewhere in this release.
(2)The production of foundry coke tons does not replace blast furnace coke tons on a ton for ton basis, as foundry coke requires longer coking time. The Domestic Coke capacity utilization is calculated assuming a single ton of foundry coke replaces approximately two tons of blast furnace coke.
(3)Reflects Domestic Coke Adjusted EBITDA divided by Domestic Coke sales volumes.
SunCoke Energy, Inc.
Reconciliation of Non-GAAP Information
Net Income to Adjusted EBITDA
| Three Months Ended December 31, | Years Ended December 31, | |||
|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |
| (Unaudited) | (Unaudited) | (Unaudited) | (Audited) | |
| (Dollars in millions) | ||||
| Net income attributable to SunCoke Energy, Inc. | $ 11.8 | $ 12.7 | $ 100.7 | $ 43.4 |
| Add: Net income attributable to noncontrolling interests | 1.0 | 1.3 | 4.2 | 5.4 |
| Net income | $ 12.8 | $ 14.0 | $ 104.9 | $ 48.8 |
| Add: | ||||
| Depreciation and amortization expense | 35.8 | 34.9 | 142.5 | 133.9 |
| Interest expense, net | 7.7 | 7.7 | 32.0 | 42.5 |
| Loss on extinguishment of debt | — | — | — | 31.9 |
| Income tax expense | 2.5 | 6.3 | 16.8 | 18.3 |
| Transaction costs(1) | 0.1 | — | 1.5 | — |
| Adjusted EBITDA | $ 58.9 | $ 62.9 | $ 297.7 | $ 275.4 |
| Subtract: Adjusted EBITDA attributable to noncontrolling interest(2) | 2.2 | 2.3 | 8.4 | 9.3 |
| Adjusted EBITDA attributable to SunCoke Energy, Inc. | $ 56.7 | $ 60.6 | $ 289.3 | $ 266.1 |
(1)Costs incurred as part of the granulated pig iron project with U.S. Steel.
(2)Reflects noncontrolling interests in Indiana Harbor.
SunCoke Energy, Inc
Reconciliation of Non-GAAP Information
Estimated 2023 Net Income to Estimated 2023 Adjusted EBITDA
| 2023 | ||
|---|---|---|
| Low | High | |
| Net income | $ 59 | $ 76 |
| Add: | ||
| Depreciation and amortization expense | 136 | 132 |
| Interest expense, net | 31 | 29 |
| Income tax expense | 24 | 28 |
| Adjusted EBITDA | $ 250 | $ 265 |
| Subtract: Adjusted EBITDA attributable to noncontrolling interest(1) | (9) | (9) |
| Adjusted EBITDA attributable to SunCoke Energy, Inc. | $ 241 | $ 256 |
(1)Reflects noncontrolling interests in Indiana Harbor.
10
q4_2022sxcearningsdeckxv
SunCoke Energy, Inc. Q4 & FY 2022 Earnings and 2023 Guidance Conference Call
2 This presentation should be reviewed in conjunction with the Fourth Quarter and Full-Year 2022 earnings release of SunCoke Energy, Inc. (SunCoke) and conference call held on February 2, 2023 at 11:00 a.m. ET. This presentation contains “forward-looking statements” (as defined in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended). Forward-looking statements often may be identified by the use of such words as "believe," "expect," "plan," "project," "intend," "anticipate," "estimate," "predict," "potential," "continue," "may," "will," "should," or the negative of these terms, or similar expressions. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Any statements made in this presentation that are not statements of historical fact, including statements about our full-year 2023 guidance, the timing of completing the foundry expansion project, the ability of our domestic coke plants to continue to operate at full capacity, and our anticipation to continue a quarterly dividend, are forward-looking statements and should be evaluated as such. Forward-looking statements represent only our beliefs regarding future events, many of which are inherently uncertain and involve significant known and unknown risks and uncertainties (many of which are beyond the control of SunCoke) that could cause our actual results and financial condition to differ materially from the anticipated results and financial condition indicated in such forward-looking statements. These risks and uncertainties include, but are not limited to, the risks and uncertainties described in Item 1A (“Risk Factors”) of our Annual Report on Form 10-K for the most recently completed fiscal year, as well as those described from time to time in our other reports and filings with the Securities and Exchange Commission (SEC). In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, SunCoke has included in its filings with the Securities and Exchange Commission cautionary language identifying important factors (but not necessarily all the important factors) that could cause actual results to differ materially from those expressed in any forward-looking statement made by SunCoke. For information concerning these factors and other important information regarding the matters discussed in this presentation, see SunCoke's Securities and Exchange Commission filings, copies of which are available free of charge on SunCoke's website at www.suncoke.com or on the SEC’s website at www.sec.gov. All forward-looking statements included in this presentation are expressly qualified in their entirety by such cautionary statements. Unpredictable or unknown factors not discussed in this presentation also could have material adverse effects on forward-looking statements. Forward-looking statements are not guarantees of future performance, but are based upon the current knowledge, beliefs and expectations of SunCoke management, and upon assumptions by SunCoke concerning future conditions, any or all of which ultimately may prove to be inaccurate. You should not place undue reliance on these forward-looking statements, which speak only as of the date of the earnings release. SunCoke does not intend, and expressly disclaims any obligation, to update or alter its forward-looking statements (or associated cautionary language), whether as a result of new information, future events, or otherwise, after the date of the earnings release except as required by applicable law. Forward-Looking Statements ~ SunCoke Energy<
32022 Year In Review Delivered record FY 2022 Adjusted EBITDA of $297.7M; achieved growth in foundry coke market; increased quarterly dividend; and significantly reduced debt FY 2022 Objective 2022 Achievements Commentary Surpass FY 2022 Consolidated Adj. EBITDA(1) guidance high end of $285M Generate $120M – $135M Free Cash Flow (2) Pursue Balanced Capital Allocation • Lowered gross debt by $83.2M; Gross leverage ratio at 1.83x (LTM basis) • Increased quarterly dividend from $0.06/share to $0.08/share • Entered into a non-binding letter of intent with US Steel to manufacture granulated pig iron (GPI) • Delivered FY 2022 consolidated Adj. EBITDA of $297.7M • Generated ~$133.4M of Free Cash Flow • Highest Adjusted EBITDA in Company’s history • Record financial performance driven by higher contribution margins on export coke sales and excellent Logistics segment performance • Continued focus on strengthening the balance sheet • Anticipate continuation of quarterly dividend • Continue to develop the GPI Project (1) See appendix for a definition and reconciliation of Adjusted EBITDA (2) See appendix for a definition and reconciliation of Free Cash Flow Build on the Commercial Success of Foundry/Export Business Support Full Cokemaking Capacity Utilization • Successfully sold all uncontracted tons into export and foundry coke markets • Initiated foundry coke expansion project to enable 100% foundry production at Jewell plant while maintaining flexibility to shift between blast and foundry coke production • Took advantage of the strong coke export market in 2022 • Built on the success in foundry by increasing market participation • Plan to complete foundry coke expansion project and continue to grow market participation in 2023 ✓ ✓ ✓ ~ SunCoke Energy"
4Q4 & FY 2022 Financial Performance (1) See appendix for a definition and reconciliation of Adjusted EBITDA (2) Coke Adjusted EBITDA includes Domestic Coke and Brazil Coke (3) Corporate and Other Adj. EBITDA includes activity from our legacy coal mining business ($/share) ($ in millions) Diluted EPS Adj. EBITDA(1) $62.9 $58.9 Q4 ’21 $275.4 Q4 ’22 $297.7 FY ’21 FY ’22 -$4.0 +$22.3 Q4 and FY 2022 Earnings Review $0.15 $0.14 $0.52 $1.19 Q4 ’21 FY ’22Q4 ’22 FY ’21 -$0.01 +$0.67 Q4 '22 EPS of $0.14 per share, down $0.01 versus prior year quarter • Lower export coke contribution margins partially offset by lower interest expense FY '22 EPS of $1.19, up $0.67 per share from the prior year period • Primarily driven by strong operating results, absence of debt refinancing expenses, and lower interest expense Q4 '22 Consolidated Adj. EBITDA(1) of $58.9M, down $4.0M compared to Q4 '21 • Coke operations down $8.0M primarily driven by lower export coke contribution margins • Logistics operations up by $2.1M driven by higher volumes • Corporate and other costs lower by $1.9M mainly driven by lower legacy liability expense (non-cash) FY '22 Consolidated Adj. EBITDA(1) of $297.7M, up $22.3M compared to FY '21 • Driven by higher contribution margins on export coke sales and higher volumes & pricing in Logistics segment ($ in millions, except volumes) Qtr4 2021 Qtr4 2022 FY 2021 FY 2022 Domestic Coke Sales Volumes 1,026 1,040 4,183 4,031 Logistics Volumes 4,589 5,525 19,933 22,291 Coke Adj. EBITDA (2) $57.6 $49.6 $260.6 $277.9 Logistics Adj. EBITDA (incl. CMT) $9.6 $11.7 $43.5 $49.7 Corporate and Other Adj EBITDA (3) ($4.3) ($2.4) ($28.7) ($29.9) Adjusted EBITDA (Consolidated) (1) $62.9 $58.9 $275.4 $297.7 Operating Cash Flow $49.1 $88.3 $233.1 $208.9 : : ~ SunCoke Energy"
5Adjusted EBITDA(1) – FY ‘21 to FY '22 $275.4 $297.7 $17.3 ($1.2) Domestic & Brazil Coke $6.2 FY 2021 Adj. EBITDA Logistics FY 2022 Adj. EBITDA Corporate and Other (1) See appendix for a definition and reconciliation of Adjusted EBITDA (1) Higher contribution margins from success in export coke sales Higher throughput volumes and higher prices ($ in millions) (1) FY '22 performance driven by higher contribution margins on export coke sales and higher volumes & pricing in Logistics Higher employee related expenses, partially offset by lower non-cash legacy liability l l l ~ SunCoke Energy"
6 $63.8 $90.0 $208.9 SXC DividendCash @ YE 2021 ($23.6) Net Cash Provided by Ops. Activities ($75.5) ($83.2) CapEx Debt Reduction ($0.4) Other Cash @ YE 2022 Revolver Availability: $315.0M (Consolidated) 12/31/2021 12/31/2022 Total Debt $627M $544M Gross Leverage (1) 2.28x 1.83x Net Leverage (1) 2.05x 1.52x FY 2022 Capital Deployment Strong cash flow generation deployed strategically towards operational capital needs, deleveraging, and increased dividends to shareholders ($ in millions) Increased dividend by 33% from 6 cents to 8 cents in Q3 (1) Gross leverage and Net leverage calculated using Last Twelve Month(LTM) Adjusted EBITDA ~-----------------------------------------------------------, I I I I I I I I I I I I I I I I I I I I '-------------------- I ~----------------------------------------------------------- -------r------- ~ SunCoke Energy"
2023 GUIDANCE
8Projected 2023 Adjusted EBITDA Guidance $297.7 Domestic CokeFY 2022 Adj. EBITDA (Consolidated) ($5) – ($6) ($22) – ($30) ($3) - $0 Brazil Coke Logistics ($6) – ($9) Corporate and Other $250 - $265 FY 2023 Adj. EBITDA Guidance (Consolidated) (1) See appendix for a definition and reconciliation of Adjusted EBITDA (1) ($ in millions) Expect 2023 consolidated Adjusted EBITDA (1) of $250M - $265M mainly driven by lower price realization on export coke sales Running at full capacity but expect lower price realization on export sales Lower due to expiration of technology fees per 2016 agreement (1) Normalized legacy liability expense Normalized high water cost at CMT l l l ~ SunCoke Energy"
92023 Domestic Coke Business Outlook Domestic Coke Adj. EBITDA estimated to be $234M - $242M; Expect to run at full capacity with continued growth in foundry market Domestic Coke Performance 4,183 4,031 $243.4M $263.4M FY 2021 FY 2022 ~4,000 FY 2023E $234M - $242M Adj. EBITDA ($M) • Continue to operate coke fleet at full capacity • ~3,600Kt contracted furnace coke tons • Remaining ~650Kt equivalent furnace coke tons to be sold in foundry and export markets • Majority of foundry coke sales finalized for 2023 with continued year-over-year volume growth • Q1 export coke sales finalized • Lower price realization assumption on export sales driven by market conditions (1) FY 2021-2022 and FY 2023E estimated Domestic Coke sales includes coke produced for export and foundry sales (2) See appendix for a definition and reconciliation of Adjusted EBITDA (2) (1)(1)(1) (Coke Sales, Kt) • • - ~ . SunCoke Energy
102023 Logistics Business Outlook Logistics Adjusted EBITDA estimated to be $47M - $50M; Anticipate similar volumes at CMT year-over-year Logistics Performance 9,750 10,023 10,183 12,268 $43.5M $49.7M FY 2021 FY 2022 $47M - $50M ~12,000 ~10,000 FY 2023E 19,933 22,291 ~22,000 2023 outlook based on current expectations for thermal coal export volumes and pricing • Expect CMT volumes to be relatively flat year-over-year • Anticipate CMT to handle ~5.7Mt coal for export and ~4.3Mt other products • Similar to 2021, 2022 was an unusual year with no high-water cost; 2023 assumed to be a more normalized year (1) (1) See appendix for a definition and reconciliation of Adjusted EBITDA (Tons Handled, Kt) Logistics Adj. EBITDA ($M) Logistics (ex. CMT) CMT • • • □ • ~ . SunCoke Energy
112023 Guidance Summary Expect 2023 Consolidated Adjusted EBITDA of $250M - $265M; 2023 Free Cash Flow of $105M - $120M (1) See appendix for a definition and reconciliation of Adjusted EBITDA (2) Domestic coke sales for 2022 and 2023 estimate includes production for foundry and export sales (3) Domestic Coke Adj. EBITDA/ton calculated as Domestic Coke EBITDA/Domestic Coke Sales (4) Capital expenditure guidance excludes the impact of capitalized interest (5) See appendix for a definition and reconciliation of Free Cash Flow (FCF) 2022 2023 Results Guidance Adjusted EBITDA Consolidated(1) $297.7M $250M - $265M Domestic Coke EBITDA $263.4M $234M - $242M Logistics EBITDA $49.7M $47M - $50M Domestic Coke Sales(2) 4.03M ~4M tons Dom. Coke Adj. EBITDA/ton (3) $65/ton $59 - $61/ton Total Capital Expenditures $75.5M ~$95M(4) Free Cash Flow (5) $133.4M $105M - $120M Cash Taxes $14.6M $12M - $16M Metric 2022 ($ in millions except per share amounts) Actuals Low End High End Adjusted EBITDA (1) $298 $250 $265 Cash interest ($30) ($28) ($26) Cash taxes ($15) ($12) ($16) Total capex ($76) ($95) ($95) Transaction Costs ($2) $0 $0 Working Capital changes ($43) ($10) ($8) Free Cash Flow (FCF) (2) $133 $105 $120 SXC Shares Outstanding on 12/31/22 83.4 83.4 83.4 FCF/Share $1.60 $1.26 $1.44 Adjusted EBITDA to FCF Walk 2023E (1) See appendix for a definition and reconciliation of Adjusted EBITDA (2) See appendix for a definition and reconciliation of Free Cash Flow (FCF) ~ SunCoke Energy"
12 • Execute on foundry expansion project • Continue to grow foundry market participation and strengthen customer relationships for long-term success Build on the Commercial Success of Foundry Business 2023 Key Initiatives • $250M - $265M Adjusted EBITDA Achieve 2023 Financial Objectives Continued Safety and Environmental Excellence • Continue to deliver strong safety and environmental performance • Successfully execute on operational and capital plan • Support full capacity utilization of cokemaking assets Deliver Operational Excellence and Optimize Asset Utilization • Continue to pursue balanced capital allocation including growth opportunities, deleveraging, and returning capital to shareholders Execute on Well-Established Capital Allocation Priorities ~ SunCoke Energy"
APPENDIX
14 Domestic Coke Performance Domestic Coke Business Summary 136 111 132 122 116 309 296 295 306 311 275 258 270 277 267 169 158 170 172 173 142 152 131 151 156 1,031 $46.5M 997 $53.4M Q3 ’22 $76.6M 1,023 $64.3M 1,028 Q1 ’22Q4 ’21 $76.0M Q2 ’22 Q4 ’22 975 Granite CityAdjusted EBITDA HaverhillMiddletown Indiana Harbor Jewell Sales Tons (Coke Production, Kt) (1) See appendix for a definition and reconciliation of Adjusted EBITDA and Adjusted EBITDA per ton 1,007K1,026K FY '22 Domestic Coke Adjusted EBITDA above the revised guidance range driven by high contribution margins on export coke sales 962K (1) 1,022K 566 480 460 1,217 1,209 1,200 1,104 1,072 1,100 680 673 680 595 590 560 4,162 FY ’22FY ’21 $243.4M FY ’23E $263.4M $234M - $242M 4,023 4,000 1,040K 4,183K 4,031K ~4,000K □ □ • • • ~ SunCoke Energy"
15 $9.6M $12.6M $12.5M $12.9M $11.7M Logistics Business Summary 1,965 2,261 2,619 2,563 2,579 2,625 2,974 3,190 3,158 2,946 Q3 ’22Q1 ’22 Q4 ’22Q2 ’22Q4 ’21 4,589 5,809 5,236 5,721 5,525 Logistics (ex. CMT) CMT (coal, bulk products, liquids) (Tons Handled, Kt) (1) See appendix for a definition and reconciliation of Adjusted EBITDA. FY '22 Logistics Adjusted EBITDA strong results driven by strong volume/price as well as minimal high water costs at CMT Logistics Performance Total Logistics Adj. EBITDA ($M) 9,750 10,023 10,183 12,268 ~12,000 FY ’21 $43.5M 22,291 $49.7M FY ’22 FY ’23E ~22,000 $47M - $50M ~10,000 19,933 (1) • • • • • • • □ • ~ SunCoke Energy"
16 NON-GAAP FINANCIAL MEASURES In order to assist readers in understanding the core operating results that our management uses to evaluate the business, we describe our non- GAAP measures referenced in this presentation below. In addition to U.S. GAAP measures, this presentation contains certain non-GAAP financial measures. These non-GAAP financial measures should not be considered as alternatives to the measures derived in accordance with U.S. GAAP. Non-GAAP financial measures have important limitations as analytical tools, and you should not consider them in isolation or as substitutes for results as reported under U.S. GAAP. Additionally, other companies may calculate non-GAAP metrics differently than we do, thereby limiting their usefulness as a comparative measure. Because of these and other limitations, you should consider our non-GAAP measures only as supplemental to other U.S. GAAP-based financial performance measures, including revenues and net income. Reconciliations to the most comparable GAAP financial measures are included at the end of this Appendix. DEFINITIONS Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted for any impairments, restructuring costs, gains or losses on extinguishment of debt, and/or transaction costs ("Adjusted EBITDA"). EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives to net income or operating income under GAAP and may not be comparable to other similarly titled measures in other businesses. Management believes Adjusted EBITDA is an important measure in assessing operating performance. Adjusted EBITDA provides useful information to investors because it highlights trends in our business that may not otherwise be apparent when relying solely on GAAP measures and because it eliminates items that have less bearing on our operating performance. EBITDA and Adjusted EBITDA are not measures calculated in accordance with GAAP, and they should not be considered a substitute for net income, or any other measure of financial performance presented in accordance with GAAP. EBITDA represents earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA attributable to SXC represents Adjusted EBITDA less Adjusted EBITDA attributable to non-controlling interests. Adjusted EBITDA/Ton represents Adjusted EBITDA divided by tons sold/handled. Free Cash Flow (FCF) represents operating cash flow adjusted for capital expenditures. Management believes FCF is an important measure of liquidity. FCF is not a measure calculated in accordance with GAAP, and it should not be considered a substitute for operating cash flow or any other measure of financial performance presented in accordance with GAAP. ~ SunCoke Energy<
17Coke Facility Capacity and Contract Duration/Volume (1) Capacity represents blast furnace equivalent production capacity (2) Represents production capacity for blast-furnace sized coke, however, customer takes all on a “run of oven” basis, which represents >600k tons per year. Facility Capacity (1) Customer Contract Expiry Contract Volume Middletown 550 Kt (2) Cliffs Steel Dec. 2032 Capacity Haverhill II 550 Kt Cliffs Steel June 2025 Capacity Granite City 650 Kt US Steel Dec. 2024 Capacity Indiana Harbor 1,220 Kt Cliffs Steel Oct. 2023 Capacity Haverhill I/JWO 1,270Kt Cliffs Steel Algoma Steel Dec. 2025 Dec. 2026 400 Kt 150 Kt ~ SunCoke Energy"
18Balance Sheet & Debt Metrics 2023 2024 2025 2026 2027 2028 2029 Consolidated Total Sr. Notes -$ -$ -$ -$ -$ -$ 500.0$ 500.0$ Sale Leaseback 3.3 5.5 - - - - - 8.8 Revolver - - - 35.0 - - - 35.0 Total 3.3$ 5.5$ -$ 35.0$ -$ -$ 500.0$ 543.8$ As of 12/31/2022 ($ in millions) As of 12/31/2022 As of 12/31/2021 Cash 90$ 64$ Available Revolver Capacity 315$ 229$ Total Liquidity 405$ 293$ Gross Debt (Long and Short-term) 544$ 627$ Net Debt (Total Debt less Cash) 454$ 563$ LTM Adj. EBITDA 298$ 275$ Gross Debt / LTM Adj. EBITDA 1.83x 2.28x Net Debt / LTM Adj. EBITDA 1.52x 2.05x ~ SunCoke Energy"
192023 Guidance Reconciliation (1) Reflects non-controlling interest in Indiana Harbor Free Cash Flow Reconciliation ($ in millions) Low High Net Income $59 $76 Depreciation and amortization expense 136 132 Interest expense, net 31 29 Income tax expense 24 28 Adjusted EBITDA (Consolidated) $250 $265 Adjusted EBITDA attributable to noncontrolling interest(1) (9) (9) Adjusted EBITDA attributable to SXC $241 $256 2022 ($ in millions) Actuals Low High Operating Cash Flow $209 $200 $215 Capital Expenditures (76) (95) (95) Free Cash Flow (FCF) $133 $105 $120 2023E ~ SunCoke Energy"
20SXC FCF/Share Reconciliation Low End High End Net Income $59 $76 Depreciation and amortization expense 136 132 Interest expense, net 31 29 Income tax expense 24 28 Adjusted EBITDA $250 $265 Cash interest (28) (26) Cash taxes (12) (16) Total capex (95) (95) Working capital changes (10) (8) Free Cash Flow (FCF) $105 $120 SXC Shares Outstanding on 12/31/22 83.4 83.4 FCF/Share $1.26 $1.44 ($ in millions except per share amounts) 2023E ~ SunCoke Energy"
21Reconciliation to Adjusted EBITDA and Adjusted EBITDA attributable to SXC (1) Reflects non-controlling interest in Indiana Harbor (2) Costs incurred as part of the granulated pig iron project with U.S. Steel ($ in millions) Q4 '21 FY '21 Q1 '22 Q2 '22 Q3 '22 Q4 '22 FY '22 Net income (loss) attributable to SunCoke Energy, Inc. 12.7$ 43.4$ 29.5$ 18.0$ 41.4$ 11.8$ 100.7$ Net income attributable to noncontrolling interests 1.3 5.4 1.1 1.0 1.1 1.0 4.2 Net Income (loss) 14.0$ 48.8$ 30.6$ 19.0$ 42.5$ 12.8$ 104.9$ Depreciation and amortization expense 34.9 133.9 35.2 35.8 35.7 35.8 142.5 (Gain) Loss on extinguishment of debt, net - 31.9 - - - - - Interest expense, net 7.7 42.5 8.0 8.3 8.0 7.7 32.0 Income tax expense (benefit) 6.3 18.3 10.0 7.2 (2.9) 2.5 16.8 Transaction costs (2) - - - 1.0 0.4 0.1 1.5 Adjusted EBITDA 62.9$ 275.4$ 83.8$ 71.3$ 83.7$ 58.9$ 297.7$ Adjusted EBITDA attributable to noncontrolling interest(1) (2.3) (9.3) (2.1) (2.0) (2.1) (2.2) (8.4) Adjusted EBITDA attributable to SXC 60.6$ 266.1$ 81.7$ 69.3$ 81.6$ 56.7$ 289.3$ ~ SunCoke Energy"
22Adjusted EBITDA and Adjusted EBITDA per ton (1) Corporate and Other includes the results of our legacy coal mining business. Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per Ton ($ in millions, except per ton data) Domestic Coke Brazil Coke Logistics Corporate and Other(1) Consolidated FY 2022 Adjusted EBITDA $263.4 $14.5 $49.7 ($29.9) $297.7 Sales Volume (thousands of tons) 4,031 1,585 22,291 Adjusted EBITDA per Ton $65.34 $9.15 $2.23 Q4 2022 Adjusted EBITDA $46.5 $3.1 $11.7 ($2.4) $58.9 Sales Volume (thousands of tons) 1,040 377 5,525 Adjusted EBITDA per Ton $44.71 $8.22 $2.12 Q3 2022 Adjusted EBITDA $76.6 $3.3 $12.9 ($9.1) $83.7 Sales Volume (thousands of tons) 1,022 382 5,721 Adjusted EBITDA per Ton $74.95 $8.60 $2.26 Q2 2022 Adjusted EBITDA $64.3 $3.9 $12.5 ($9.4) $71.3 Sales Volume (thousands of tons) 1,007 406 5,809 Adjusted EBITDA per Ton $63.85 $9.59 $2.15 Q1 2022 Adjusted EBITDA $76.0 $4.2 $12.6 ($9.0) $83.8 Sales Volume (thousands of tons) 962 419 5,236 Adjusted EBITDA per Ton $79.00 $10.12 $2.41 FY 2021 Adjusted EBITDA $243.4 $17.2 $43.5 ($28.7) $275.4 Sales Volume (thousands of tons) 4,183 1,685 19,933 Adjusted EBITDA per Ton $58.19 $10.21 $2.18 Q4 2021 Adjusted EBITDA $53.4 $4.2 $9.6 ($4.3) $62.9 Sales Volume (thousands of tons) 1,026 417 4,589 Adjusted EBITDA per Ton $52.05 $10.07 $2.09 ~ SunCoke Energy"
Document
Investors and Media:
Shantanu Agrawal
630-824-1907
SUNCOKE ENERGY, INC. DECLARES CASH DIVIDEND
Lisle, IL (February 2, 2023) – Today, SunCoke Energy, Inc. (NYSE: SXC) announced that its Board of Directors declared a cash dividend of $0.08 per share of the Company’s common stock to be paid on March 1, 2023 to stockholders of record at the close of business on February 16, 2023.
ABOUT SUNCOKE ENERGY, INC.
SunCoke Energy, Inc. (NYSE: SXC) supplies high-quality coke to domestic and international customers. Our coke is used in the blast furnace production of steel as well as the foundry production of casted iron, with the majority of sales under long-term, take-or-pay contracts. We also export coke to overseas customers seeking high-quality product for their blast furnaces. Our process utilizes an innovative heat-recovery technology that captures excess heat for steam or electrical power generation and draws upon more than 60 years of cokemaking experience to operate our facilities in Illinois, Indiana, Ohio, Virginia and Brazil. Our logistics business provides export and domestic material handling services to coke, coal, steel, power and other bulk customers. The logistics terminals have the collective capacity to mix and transload more than 40 million tons of material each year and are strategically located to reach Gulf Coast, East Coast, Great Lakes and international ports. To learn more about SunCoke Energy, Inc., visit our website at www.suncoke.com.